Question

Provide a summary of the importance of financial companies, using the following issues:

1- The difference between financial and non-financial companies
2- The difference between banks and insurance companies (in terms of accounting and financing)
3- What do financial companies offer to the Palestinian economy?
4- By taking a sample, what is the composition of ownership in the banks and the insurance companies in Palestine?

Word Limit;

Upper word limit: 1,300 words for a whole assignment

Lower word limit: 800 words for a whole assignment

Answer 1

Meaning of Financial Companies: Financial companies are those companies which lend money to the borrowers on some interest charges. In other words it can say that Financial companies are those companies which circulate finance for the business/company in terms of loans, interest charges etc.

Importance of Financial Companies: Financial companies are important for the businesses and the companies as they circulates finance and maintain the liquidity in the market. These companies provides loan to the borrowers at some interest charges.It also helps in fund flow and cash flow in the market for the businesses and the companies. So Financial companies plays a very important role for managing the finance and the finance in the market or for the business is like a blood in the human body.

Matter: There are various types of companies which are financially or non financially works like:-

1. Difference between Financial and Non Financial Companies - The main difference between these two is that the Financial companies give loans to the borrowers at some interest charges but the non financial companies they do everything apart from the financially works. The main examples of Financial companies like - Muthoot gold finance they provide loans to the borrowers by mortgaging their golds. But the non financial companies are mutual funds they take the investment amount from the people and invest in the other investment companies and make profits and give some profit percentage to the people.
2. Difference between banks and Insurance companies- The main difference between these two is that in banks people deposits and withdraws their amount for their savings and expenses purposes but the insurance companies provide insurance to the people when the people pay some premiums to the insurance companies. Insurance companies mainly insures the life of the persons.But banks ensures the safe deposits of the money of the people in the banks.
3. Palestinian Economy - Financial companies offer to the Palestinian economy for the basic social services for the benefit of the economy and the for the structure and development. However the Palestinian has the main industries of cement,textiles,olive,food processing etc so these business helps the economy in generating the income. And the Palestinian economy is strong but now a days due to coronavirus it faces a lot of economic crisis and challenges.
4. Ownership and Composition - Composition and ownership has owned by the Jordan and occupied the West Bank and Israel captured the West Bank. However Palestine has controlled by Baby lions,Romans,Greeks,Persians etc. So all the banks and insurance companies of the Palestine are controlled by Islam.

Summary: Financial companies are those companies which lends money to the borrowers at some interest charges. And in the world there are various types of institutions which circulates and manage the finance in the market and creates liquidity. And these are like Financial,Non Financial companies,Banks and Insurance companies but all of these do functions differently. But in Palestinian economy all are these controlled by the Israel and Islam however the palestinian economy is very strong due to main industries working there like - Olive wood.textiles,cement etc but now a days due to coronavirus its badly impacted.